At the end of this month, Tesla will be ending their Customer referral program which offers incentives for existing Tesla owners to help drive sales. Tesla owners can give their friends a referral code to get six months of free charging via Tesla’s Supercharger network, it is now ending on 1st of February.
Tesla first launches the program in 2015 with the aim to encourage customers to promote Tesla vehicles. Over the years the program went into some iterations, at first, Tesla is giving credits directly to the new buyers and owners who referred new sales. Later, the company changes the incentives to prizes for referrers and Supercharger access for new buyers.
In a tweet CEO Elon Musk explained, “The Tesla customer referral program will end on Feb 1. If you want to refer a friend to buy a Tesla & give them 6 months of free Supercharging, please do so before then.”
The customer referral program was adding too much cost to Tesla cars, especially the Model 3 Musk said in a follow-up tweet, The company thought to increase cost-cutting effort. Last month, Tesla cut prices on Model 3 in China and in last week the company discontinued the low priced versions of the Model S sedan and Model X SUV.
In the last quarterly report, Tesla gained its first profit in the span of two years, a net profit of $311.5 million and $881 million in free cash flow. Recently, the referring friend becomes eligible for a set of outlandish prizes, because they have launched a photo into deep space orbit to a VIP invite to one of the company’s flashy unveiling events which depend on how many qualifying referrals were made.
The referral program was a very wise decision on the part of the company as it puts Tesla acolytes to work by turning them into semi-compensated brand ambassadors. But for them, it was not sustainable.